Green shoots in Cape Town property market

Pam Golding Properties reports that its agents in the Cape Town metro area have had a busier than expected mid-winter season, with several branches achieving record turnover and notable sales – despite this being traditionally the very quietest time of year for property sales in this region.

PGP’s MD for the Western Cape metro region, Laurie Wener, says the months from June to August (2011) saw steady sales and improved attendance at show-houses across the Cape metro area.  “There was particular activity in the market for end-users buying primary residences in the price bracket from R3 million to R8 million,” she says. “We also have a definite sense that people are once again starting to buy and sell in order to upgrade their homes - whereas in previous months there has been a tendency to sit tight and wait for the market to turn.  Over 50 percent of our sales in this quarter have been cash deals, while most of those who have required mortgages have had around 40 to 50 percent cash equity, meaning that they generally do qualify for finance.”

Atlantic Seaboard and City Bowl

Wener says a stand-out area was the City Bowl, where the market for free-standing houses has proved to be fairly recession-proof.  “These homes are always in demand,” she says, “due to the central location of the area, close to beaches, top schools and places of work, and with easy access to highways.  People simply don’t want to move once they have experienced the convenience of living here, so there is always a shortage of stock, which helps to keep prices stable.”

PGP’s area manager for the City Bowl and Atlantic Seaboard, Basil Moraitis, says it has been the busiest winter season in five years for his team of agents.  “We concluded over R200 million in sales in July and August alone,” he says, “which is unusually high for mid- winter in this region, especially in the seaside areas where the outdoor lifestyle is so much a part of the value offering.”

Notable sales in this area included:
  • R27 million for an apartment on the water’s edge in Bantry Bay, sold to a local buyer
  • R18.7 million for a bungalow on Glen Beach, sold to an expatriate buye
  • R14.3 million for a contemporary home at the very top of Fresnaye, sold to an international buyer
  •  R14.3 million for a home in Llandudno, sold to an international buyer
  • R13.5 million for an apartment in the Two Oceans complex in Mouille Point
  • R13.5 million for a home in Camps Bay
  • R8.2 million for an apartment in the new Quarry Hill secure development in the City Bowl
  • Southern Suburbs

Cape Town’s Southern Suburbs have also seen steady interest, particularly from buyers with school-going children.  Proximity to leading private and government schools remains a major draw-card for this area, as does its offering of larger homes with good-sized gardens, ideal for family use.  

Among the stand-out sales in the mid-winter season were:
  • R7.6 million for a home in Rondebosch, sold by PGP in August
  • R4.7 million for an historic Cape Dutch farmhouse in Mowbray - a new record for the area. The previous highest price for residential property in the suburb (across all agencies) was R3.3 million, set in October 2010.
  • R4.7 million for a five-bedroomed home in Clarepark, sold to a cash buyer. This is the highest price ever achieved in this section of Claremont.  The previous record of R4.3 million was also set by a PGP agent, in November 2010.
  • R2.92 million for a four-bedroomed renovated Victorian home in lower Claremont.  This was a particularly high price for the area south of Queen Victoria Road.

Western Seaboard

The Western Seaboard, spanning the area from Lagoon Beach to Big Bay, was also unusually busy in the mid-winter season.  

PGP’s area manager Ivan Swart says July was his team’s highest value sales month of the financial year so far (commencing March 2011), with the majority of sales taking place in the more affordably-priced categories, from R400 000 to R2 million.  Swart also notes an encouraging return of first-time buyers and first-time investors, seeking homes in the R400 000 to R800 000 category.  At the other end of the scale, a luxury home in Bloubergstrand proper was sold for R8 million.

“The bulk of our sales were concluded in Flamingo Vlei, Sunningdale, Parklands and Blouberg surrounds,” he says, “in particular Sunningdale, where gated villages have been in high demand.  One of our most notable sales in these complexes was for R1.58 million, and there were several others around the R1.5 million mark, which is quite high for this area.”

Another popular category of homes was golf estates, with both Sunset Links and Atlantic Beach seeing activity in the R2.9 million to R4.5 million range.

West Coast

Further up the West Coast, sales activity has been most dominant in the market from R2.2 million to R4 million.  Notable sales have included the following:
  • R4.15 million for a beachfront home in Britannia Bay, sold in September and expected to be renovated for use as a guest house
  • R2.8 million for a beachfront house in Yzerfontein, sold in August to a Cape Town couple for use as a holiday home
  • R2.755 million for a beachfront cottage in Langebaan, sold in July to Gauteng buyers who will use it as a holiday home
  • Another beachfront home in Britannia Bay, also sold in September for R2.65 million as a holiday home
  • A cottage in Paternoster sold for R2.6 million in August, to Gauteng buyers who will use it as a holiday home

South Peninsula

The South Peninsula is another area which is highly seasonal, and which typically sees a drop-off in sales during the winter months, particularly in the market for second homes. PGP’s area manager Sandi Gildenhuys says one area which bucked this trend quite noticeably was Imhoff’s Gift, the secure estate located in the wetland area close to the town of Kommetjie.  “PGP sold 10 properties here between June and September 2011,” she says, “to a total sales value of R14.46 million.  The majority of buyers were existing Cape Town residents.”

PGP also sold a property in Misty Cliffs for R5.1 million, to an international buyer already resident in the Cape.

Wener concludes that these mid-winter sales are encouraging indicators of a slow but steady return of confidence in the market as spring approaches.  “The fact that some positive signs are being reported from virtually every area within the Cape metro region makes us optimistic about the prospects for the final quarter of the year,” she says.

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